STATEMENT BY MICHAEL J. MALBIN ABOUT CFI’S AND NY SENATE REPUBLICANS’ CONFLICTING ESTIMATES FOR THE COST OF A MATCHING FUND SYSTEM IN NEW YORK STATE

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Mystery solved. New York State’s Senate Republicans on April 24 finally released the background for their “estimated” cost of a public matching fund system in New York State.
Their paper presented the cost as being $221.55 million per election cycle.

The one-page sheet was released within hours after Michael J. Malbin, executive director of the Campaign Finance Institute (CFI) and Professor of Political Science at the
University at Albany, had briefed reporters in Albany’s Legislative Office Building about the basis for CFI’s cost estimate for the same bill. CFI has estimated that public
matching funds would cost between $26 million and $41 million per year over the course of four-years.
(A copy of the study containing this estimate is available here.)

What could explain these wildly different cost estimates? It turns out, now that the Senate Republicans’ numbers have seen the light of day, that there is not any real mystery. The Senate Republicans simply assumed that every race for every office in the state would have two candidates drawing the maximum permissible amount of public funds for the general election. In a quarter of the districts, the paper also imagined primary challengers and incumbents getting another dose of maximum public funding.

It is impossible to call this piece of work a “study”. It is little more than back of the envelope arithmetic based on incredible assumptions.

The CFI study was based on a methodology that had previously been through a process of peer review. CFI’s higher estimates assumed that every candidate who ran in 2010 and 2012 doubled the number of his or her donors, with each new donor giving $50 and stimulating $300 in matching funds. It was based on a review of every single donor’s contributions in every one of the state’s races. The process involved hard-slogging research from the bottom up; not assumptions handed out from the top down.

So which approach can withstand the scrutiny? One test might be to look at how many candidates have “maxed out” in New York City, which is the system that the state is thinking about emulating. In the years between 2001 and 2009 (covering all of the city’s elections with multiple matching funds) 51% of the candidates who participated in the voluntary matching fund system raised enough in qualified contributions to be eligible for the maximum public match.

That 51% is obviously well short of 100%. But how does it stack up against CFI’s “bottom up” approach? It turns out that under CFI’s double-your-number-of-donors scenarios, 43% of New York State’s major party Assembly candidates in 2012 had already been counted as if they would have “maxed out” under public matching funds, along with 33% of the State Senate candidates. In addition, the higher rate of hitting the funding cap among city than state candidates reflects the city’s substantially lower public funding cap. In other words, CFI’s bottom-up approach produced results that match up reasonably well with New York City’s historical experience.

“We never looked at the maxing out numbers until the Senate Republicans came out with their paper, Malbin said. “To assume everyone will max out is a fantasy. The ceilings don’t come into play until the candidates find the new donors. To check the alternative, I felt as if I were in grade school again making sure all the columns and rows added up. It was gratifying to see that the cross-check validated what we have been doing.”

The Campaign Finance Institute is a non-partisan, non-profit research institute. Statements of the Campaign Finance Institute and its Task Forces do not necessarily reflect the views of CFI's Trustees or financial supporters.